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Oklahoma seeks more consumers damaged by mortgage industry

The state has distributed millions of dollars to Oklahomans harmed by improper foreclosure practices of some of the nation's largest banks. But there are millions of dollars more in the fund.
by Brianna Bailey Modified: May 11, 2013 at 5:57 am •  Published: May 13, 2013

The $10,000 check Joe Shuffield received from the Oklahoma Mortgage Settlement wasn't enough to save his home from foreclosure.

Earlier this month, Shuffield, an Army veteran who served in the Gulf War, filed for chapter 13 bankruptcy to prevent having the 1,700 square-foot brick ranch house in The Village where he lives with his wife Shannon from being auctioned at a sheriff's sale.

“We used the money to get caught up on our bills,” Joe Shuffield said of the mortgage settlement. “It didn't really help, plus we were still fighting in court to save our home at the time.”

The Shuffields are among the more than 300 Oklahomans who have been awarded cash settlements of up to $20,000 through the $18.6 million settlement that Oklahoma Attorney General Scott Pruitt negotiated with Bank of America, Citi, JPMorgan Chase, GMAC/Ally, and Wells Fargo in 2012 for improper foreclosure practices.

While the settlement can't fully compensate homeowners for the loss of their homes, Oklahomans are being served faster and are receiving more compensation than consumers in the 49 states that participated in the $25 billion National Mortgage Settlement are expected to receive, Pruitt said.

However, eight months after state officials distributed the first checks to Oklahoma consumers victimized by illegal practices such as robo-signing and dual-track foreclosures, the attorney general's office has committed only a little more than $6 million from the settlement toward compensating homeowners, records show.

“It's probably representative of the extent and type of conduct that occurred in Oklahoma,” Pruitt said. “We didn't have the rash of foreclosures that there was in Florida, Nevada and California.”

Fund reopening

With more than $12.6 million remaining, Pruitt has decided to reopen the settlement fund again to Oklahomans who have been victimized. Beginning Monday, the attorney general's office will begin accepting applications for a second round of settlement payments. The agency will also continue to give grants to the Oklahoma Bar Association and Legal Aid Services of Oklahoma to fund foreclosure education and defense programs.

While the initial phase of the mortgage settlement was available to homeowners who experienced harm between 2008 and 2011, Pruitt's office is expanding the settlement period to people who were victims of improper foreclosure practices in 2012, because investigators noticed similar practices on the part of mortgage servicers after the settlement cut off.

“Oklahomans are going to be served by the settlement in a very meaningful way,” Pruitt said. “We are very intent on going through those files and making sure harm is addressed.”

The attorney general's office also has committed to once again review applications for Oklahomans who did not qualify for cash compensation during the first phase of settlement payouts because the applicants missed the deadline.

Frustrated borrowers

Shuffield said he hadn't missed a mortgage payment in 10 years before his income from a satellite and computer installation business dried up during the last recession.

After the Shuffield's home went into foreclosure, the couple also fell victim to a company based in Florida that claimed it would help them keep their home in exchange for a $900 fee. The firm did little to assist them after taking their money.

Shuffield claims their mortgage servicer, Ocwen Financial Corp., which acquired the couple's note from GMAC Mortgage, has been unwilling to work with the couple to reduce their monthly payments. A representative for Ocwen last week said the company would review the Shuffield's file.

With the settlement money he received gone, Shuffield said all he has left is hope that things will get better.

“The only thing I can say is that we keep our heads up and pray,” Shuffield said. “There are a lot of people out there who are worse off than us.”

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by Brianna Bailey
Business Writer
Brianna Bailey has lived in Idaho, Germany and Southern California, but Oklahoma is her adopted home. She has a bachelor's degree in Journalism from the Univerisity of Oklahoma and has worked at several newspapers in Oklahoma and Southern...
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How to apply

Oklahomans who believe they have been victimized by improper mortgage practices can apply for up compensation at www.oag.ok.gov.

Qualifying factors:

Mishandling of loan modification

Improprieties in the foreclosure process

Payments range between $5,000 to $20,000 depending on the circumstances of each case

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